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Wednesday, Nov 25, 2009
Anyone who thinks Enron executives can't be all bad didn't see them before Congress Thursday.
Feb 8, 2002 | There was swagger and acid. There were "not to the best of my recollection"s and pleadings of the Fifth. Finger-pointing and pointed questions and congressional demagoguery, and an emotional moment in the late afternoon, when a former Enron vice chair who committed suicide at the end of January was discussed.
Members of Congress, loaded for Enron bear for weeks -- with even itchier trigger fingers after the Monday pull-out of ex-CEO Ken Lay -- finally took their shots Thursday, as former executives from the tattered company testified before the House Energy and Commerce Committee's investigative arm.
The only thing missing was a shred of responsibility for the shell partnerships that one securities analyst testified were a "blatant conflict of interest that would never have passed the smell test had it been discovered." And there still seems to be no Houstonian seemingly man enough to accept blame for a Fortune 10 company imploding to become the single largest bankruptcy declaration in United States history.
Is it something in the water? (We know other powerful Texans who seem to fill up with righteous arrogance when put on the defensive.) Whatever it is, it suggests that few, if any, of these officials ever seem able to put ethical considerations above legal concerns. Which in itself probably helps explain how we got into this fine mess.
Eager for a sound bite on the TV news, members of Congress likened the Enron rogues' gallery to cowboys, the Corleones, "architects of Enron's house of cards" -- one even called them "economic terrorists." The company was called "a cesspool," "a cancer," and "a disaster almost Biblical in scope."
Amid that baiting and grandstanding, the Enron execs most targeted by the committee members, and the press, didn't take the bait. Four invoked their Fifth Amendment right against self-incrimination, led by former chief financial officer Andrew Fastow who -- with $30 million from the sketchy partnerships in his pocket -- came sporting the same insufferably smug puss he's surely worn since his kegger days at Tufts. He whistles when he makes S's - declining to speak "at the advissssshhh of counsel" -- like Gopher from Winnie the Pooh.
Also invoking their right to avoid telling the truth because it might make them look bad was Fastow's deputy, the dandyish Michael Kopper, former managing director of Enron Global Finance, who reportedly made $10 million from the shell partnerships. Plus the two Dicks who were supposed to be minding the ethical store: Richard Buy, Enron's chief risk officer, and Richard Causey, chief accounting officer.
While on a break during the hearing, Rep. Ed Markey, D-Mass., could be heard telling a staffer that all of his colleagues -- who were coming and going throughout the eight-plus hour affair -- were "saying to their staffers, 'Let me know when Skilling's there!'" And indeed, Jeff Skilling, the former chief executive of Enron who resigned last summer, was the star of the show. A possibly guilty party, Skilling had informed the committee that he would be there -- and he would answer questions.
Say what you will about Skilling, he doesn't want for self-confidence. With an aggressive swagger, looking like the homelier brother of Peter Jennings, Skilling stepped right up to the microphone -- you could almost hear him thinking, "the Fifth Amendment is for pussies" -- and acted as if everyone in the world who thought there was something wrong with Enron was nuts.
"On the day I left, on August 14th, 2001, I believed the company was in strong financial condition," he said. Not only did he claim to have not known about any of the alleged improprieties surrounding Fastow's shell partnerships, but he blamed everything on a panicky public. "It's my belief that Enron's failure was due to a classic run on the bank," Skilling said, to audible gasps (at least in my corner of the cramped House hearing room). "The company was solvent and highly profitable, but apparently not liquid enough."
To be fair, Skilling was only one of many Enronians who blamed others. The doddering Robert Jaedicke, chairman of the Enron board of directors' audit committee, and Herbert Winokur Jr., chairman of the Enron board of directors' finance committee, claimed to have been ill-informed and ill-served by Enron's senior management, lawyers, and the Arthur Andersen LLP auditors. Winokur, a member of Enron's three-man investigative committee that published its internal investigation on the shell partnerships last Saturday, "respectfully disagree[d] with some parts of the report dealing with the board's performance."
